On Monday the Board of Realtors published sales stats of Columbus homes for the month of May.
On Tuesday the newspapers are full of doom and gloom stories, predicting a double dip recession and the total depression of the housing market.
At first view the housing stats don’t look good. Home sales are down by 25% as compared to a year ago, home prices keep falling and Columbus is worse off than the rest of Ohio.
Here’s an article by Business First, our local business newspaper, that claims that “Home Sales remain weak” and our “region’s decline is worse than Ohio’s”.
Before you despair and get as depressed as the housing market, I want you to take a minute and read what’s really going on. It is much better than reported by most news outlets. The chart above will help us explain what’s really going on with Columbus homes sales.
First, lets look at home sales month by month for the past 3 years (2009 – 2011). Comparing 2011 to 2010 sales data is pure non-sense, because a year ago we sold 30% more homes in the fist half of the year, due to government intervention known as the first time home buyer tax credit.
This tax credit ended in June and resulted in a 40% month to month drop of Columbus home sales from June 2010 to July 2010 (as you can see on the chart). It also resulted in the worst 6 months of home sales ever during the second half of 2010.
The chart shows monthly home sales for 2009 (yellow), 2010 (green) and 2011 (red). You can clearly see the bump in the market caused by the tax credit in May and June of 2010.
Now let’s compare the fist 5 months of 2009 and 2011. They are almost identical! We are actually ahead in 2011.
I believe that we will stay ahead of 2009 for the next few months. Just look at the number of homes in contract (2,610) that will close in June and July. That’s up by 45% from a year ago.
It looks like we will stay ahead of 2009 in June, July and August.
The end of the year 2011, however, may be weaker than 2009 (but will be better than 2010), because in fall of 2009 the home buyer tax credit was first introduced, which definitely had an impact on sales towards the end of that year.
If you want more fact and study home sales data, feel free to go to the Housing Statistics page of the Columbus Board of Realtors. There you can find monthly stats going back to 2006. They also publish data for each county, city and school district in Central Ohio.